Executives of Binggrae, Lotte, and Haitai Found Guilty in First Trial for 'Ice Cream Price Fixing'

Binggrae Corporation Fined 200 Million Won
Court: "Serious Offense for Undermining Bid Fairness"

Executives of the Big 4 ice cream companies (Binggrae, Lotte Foods, Lotte Confectionery, and Haitai Confectionery) who were prosecuted for price-fixing of ice cream were sentenced to suspended prison terms in the first trial.

On the 28th, Judge Lee Jun-gu of the Seoul Central District Court Criminal Division 18 sentenced executives of the four companies?Binggrae, Lotte Foods, Lotte Confectionery, and Haitai Confectionery?who were indicted for violating the Fair Trade Act, to suspended prison terms. The corporation Binggrae was fined 200 million won.

The court sentenced Binggrae executive Mr. Choi and Lotte Foods executive Mr. Kim to one year in prison with a two-year suspension. Lotte Confectionery executive Mr. Nam and Haitai Confectionery executive Mr. Park were each sentenced to six months in prison with a one-year suspension.

The judge stated, “The four major domestic ice cream manufacturers, including Binggrae, repeatedly engaged in collusive acts throughout their business operations, such as price increases, prohibiting sales to competitors’ clients, reducing profit margins, and restricting promotional event items, thereby undermining the fairness of bidding, which is a serious offense. In particular, Binggrae had previously been fined 700 million won in 2007 for price-fixing of cone-type products but repeated the same crime,” explaining the reasons for sentencing.

Regarding Mr. Nam and Mr. Park, who were charged with bid-rigging, the judge pointed out, “They impaired the fairness of bidding over three years and violated the fundamental purpose of the Fair Trade Act. Since they obtained unjust economic benefits for their companies through bid collusion, their culpability is not light.”

However, the court ruled that the evidence submitted by the prosecution was insufficient to recognize Binggrae’s involvement in price-fixing of cone and sandwich-type ice cream products sold at convenience stores.

Binggrae and Lotte Foods are accused of agreeing not to compete for retail stores and to raise sales prices by product type from February 2016 to October 2019. It was also investigated that they limited the items eligible for “2+1 promotions” at convenience stores and agreed on promotional margin rates. Executives of the four companies are also accused of prearranging the order and winners in Hyundai Motor’s ice cream supply bids from June 2017 to May 2019.

The Fair Trade Commission investigated this case in 2021, imposed fines totaling approximately 135 billion won on the four companies, and referred Binggrae and Lotte Foods to the prosecution.

This content was produced with the assistance of AI translation services.